Contract: essential elements of a memorandum: significance of reference to a later formal agreement

In Rossiter v Miller ((1877 – 78) L.R. 3 App. Cas. 1124, HL) W had authority to conclude a contract for the sale of certain land. M made an oral offer. W, with the owners’ authority accepted the offer in writing. This reply seemed to introduce a new term that was not acceptable to M. M wrote to W acknowledging W’s letter but stating that he would not proceed if the intention was to introduce a new term. W replied and made it clear that he had not intended to introduce a new term. M then informed W that he did not wish to proceed. The House of Lords held unanimously that the three letters taken together amounted to a sufficient memorandum of the earlier oral agreement.

The terms of the concluded oral agreement envisaged a later formal written agreement. It was held, as a matter of construction, that this was not intended as a pre-condition to the conclusion of the contract. The correspondence set out the parties, the property and the price:

‘[I]f you can find the true and important ingredients of an agreement in that which has taken place between two parties in the course of a correspondence … if the parties to the agreement the thing to be sold, the price to be paid, and all those matters, be clearly and distinctly stated, although only by letter, an acceptance clearly by letter will not the less constitute an agreement in the full sense between the parties, merely because that letter may say, We will have this agreement put into due form by a solicitor.’ (Lord Hatherley, p.1143)

The correspondence did not mention the sellers by name but referred to them as ‘the proprietors’. This was a sufficiently certain description of the sellers:

‘The parties to a contract in writing must, no doubt, be specified, but it is not necessary that they should be specified by name. The whole course of decision and practice shews that it is not. If they are so indicated, by description or by reference, as to be ascertained, or certainly ascertainable, the exigency of the statute in that respect is satisfied. Here the vendors are called proprietors, and described as proprietors in possession. There could be no mistake as to their ownership of the premises to be conveyed, and their identity, for all practical purposes, was as clearly and unequivocally established as if their names and designations had been set out in the conditions of sale.’ (Lord O’Hagan, p. 1147)

Michael Lower

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